SAP Data Transformation Projects: How to Get Ready to Meet the Coming Demands of 2021

SAP Data Transformation Projects: How to Get Ready to Meet the Coming Demands of 2021

In a recent online session, moderated by Matt Boon, Director of Strategic Research at ADAPT, Tarik Husain, Vice President of Strategic Sales at SNP JAPAC and Vasanth Kandaswamy, Head of Data and Applications Portfolio and Alliances at Fujitsu discussed with Matt, the key deliverables on how to successfully implement SAP data transformation projects.

In this article, Matt shares findings, insights and perspectives from the online session and further explores the relevance of SAP data transformation projects in 2021 and beyond.

Matt Boon, Director of Strategic Research at ADAPT

Without transforming core processes and entrenched mindsets augmented by the modernisation of incumbent and increasingly unwieldy applications, many of us will face continued friction delivering on our increasingly cloud-first, digitally-driven data transformation strategies.

The last 12 months have provided a fantastic cultural opportunity to change mindsets around how we work and challenge static practices and investments from the past with all its challenges.

Technology and business leaders in ADAPT's extensive ANZ research community remain under immense pressure balancing ongoing and unpredictable lockdowns, remote workforce productivity, and increased budgetary scrutiny. While we still face the need to improve operationally and completely rethink how we gather, manage and act on data in our quest to become data-driven organisations and businesses.

Data assets from core ERP, CRM and HR business applications holds a wealth of deep strategic insights that could better connect the organisation and enhance visibility to make critical business decisions and emerge from the current situation smarter and stronger.

This highlights the need to demonstrate how we are leveraging the value from existing investments, modernising core apps, enabling rapid innovation, and leveraging new cloud offerings and pricing models.

'If workplace transformation was the number one digital transformation initiative at the height of the pandemic, 2021 will increasingly be all about data transformation'.

Challenge and solution

ERP at the heart of legacy headaches - cloud makes its mark.

IT and business leaders have consistently told ADAPT they want to invest in technologies that improve business outcomes and operational effectiveness whilst reducing legacy reliance.

During the past two years across all its Edge events, ADAPT has been mapping the progression of cloud. Today we see 32% of all workloads in the public cloud, increasing to 42% in 2022.

Many organisations are not as concerned as they used to be about moving mission-critical workloads, such as ERP into the cloud.

That said, when polling delegates at a recent ADAPT/Fujitsu/SNP webinar, 58% of attendees were still at the planning stage to migrate SAP workloads to the cloud as illustrated below:

While migrating SAP workloads is one of many potential cloud migration scenarios, what makes it take on increased scrutiny is that most SAP workloads are mission-critical.

Pre-migration, critical considerations

• - Gain a clear understanding of just what is deployed within the organisation.
• - Create a risk profile of current assets and workloads.
• - Understand what is holding us back from moving these mission-critical workloads to the cloud, and are they founded on fact or legacy mindsets?
• - Be clear on where you stand to move forward with the changes required - what is your baseline appetite for change? If it's too high, determine how it can be lowered.
• - Identify the outcomes-based business pre-requisites first, then invest the time in the assessment phase to understand how we can align every decision and step to line up to those business outcomes.
• - Look on SAP as a part of the overall application landscape, look for interdependencies and synergies. The assessment phase to meet business outcomes should encompass your entire application landscape and prioritise workloads cloud migration accordingly.
• - Governance and compliance have taken on increased focus and attention in Australia since the Financial Services Royal Commission, which served as a wakeup call for all industry sectors. Assess and plan for each use case's regulatory requirements individually and in their entirety.
• - The business case or outcome should always be the driver; the forced migration to move off SAP by 2027 drives users to mistakenly make this another tech project. It should be a strategic, transformative initiative that enables the next phase of business growth in two very distinct phases: Migrate workloads to the cloud & Implement cloud-enabled migration to S/4 HANA.

Major data transformation project drivers in 2021

IT spending remains be conservative and under immense scrutiny, predicating the need to ensure typical investment justification questions are addressed, such as:

• - How will it help drive business and employee resilience?
• - How will it help improve operational efficiency and effectiveness?
• - How will it enable our employees and enhance their overall employee experience?
• - How will it help us differentiate our products and services?
• - How will it help us optimise and ultimately help us save time, money, and resources?

Many of these areas are driving Australian and New Zealand organisations in their quest to become data-driven organisations. However, we are still hamstrung with disaggregated and unstructured data in ever-increasing volumes.

In a post-pandemic world, resilience, efficiency, employee retention and well-being, differentiated products and services are more critical than ever. So too is the data we need to make the right decisions to deliver on these areas.

No business is immune from this. However, there will be those clear leaders prepared for and willing to take the data transformation plunge and investment, particularly in an environment where mergers, acquisitions and demergers accelerate and act as drivers for these many complex SAP data transformation and rationalisation projects.

Balancing risk with benefits amidst ongoing pandemic fuelled uncertainty

Attracting and retaining the right talent in a post-pandemic world will be a critical challenge and focus for many organisations, particularly as it relates to data, analytics, and areas related to AI, machine learning and cloud migration initiatives.

It is clear; there are not enough people on the planet to meet the increasing demand associated with these areas and to simply 'get these jobs done'.

As organisations prioritise investment and associated business outcomes that many of these data and cloud transformation projects relate to, the pressure to act and invest sooner rather than later will only increase.

De-risking transformation is key, ensuring business resilience during the transformation as well as post-implementation, is key. When a Telco in Malaysia, for example, is quoted seven days of downtime associated with an SAP cloud migration initiative, this is simply not good enough.

IT decision-makers need to expect but demand that the impact on their business during such an initiative is minimal. Leadership teams or boards will barely consider hours let alone days of downtime.

Partnering with third-party providers, particularly when we face continued limitations on resource availability due to corporate and government-mandated travel restrictions will be key to success.

Partners and vendors who have the strongest focus and capabilities related to automation are likely better placed to help organisations effectively execute these projects, in this remote and resource-constrained world.

If business downtime is one of the major challenges - how can we mitigate and reduce downtime?

It is standard practice for the cutover manager to come onboard in traditional projects, sometimes as much as halfway through the project.

Involve the business, the cutover manager and key stakeholder early, related to the benefits to be achieved, and potential disruption/change employees will face.

Typically, transformation projects involve, separating your data from the business logic. In other words, in most SAP data migration projects, all the data is loaded and then shifted across in one go.

A best practice approach is to not take the production system down at any stage. Instead, a copy or 'Rapid Empty Shell' is created. The data is then brought across incrementally, pre-determined based on time - perhaps a months' worth or weeks' worth at a time. The final stage involves the last few hours, limiting potential downtime to a matter of hours at the most.

ADAPT Perspectives

Most organisations successfully transformed the workplace, the workforce, and their customers during the darkest days of the pandemic. By and large, this was done with existing technology and capabilities - albeit at a scale never imagined.

What we have seen is a willingness to accept change and challenge legacy mindsets and processes. We have a fantastic opportunity to innovate and rapidly transform many of our core, yet entrenched approaches.

In September 2020 over 200 ANZ IT and business leaders from many of the region's largest organisations told ADAPT they would increase innovation.

As illustrated below, 59% of organisations told ADAPT they expect increased rates of innovation and a significant increase in associated funding.

Particularly as it relates to products and services being transformed digitally to help them build data-driven organisations and improve operational efficiencies.

A second question posed to delegates during the webinar was designed to understand just which business scenarios were critical to their data transformation efforts in the coming months, as shown below.

The number one outcome was related to migration across to S/4 HANA, followed by an overall strategy and desire to move to the cloud.

The key to working towards success in these scenarios with partners is a common go-to-market approach focused on what the business is seeking to achieve - business first, technology second.

The four key points to consider when looking at any business scenario are:

1. 1. Early engagement is crucial.
2. 2. Having a clear vision - or destination postcard with exact steps to getting there identified.
3. 3. Where do you stand today compared to where you want to get to and is the business on board?
4. 4. Make sure you have business buy-in and executive sponsorship.

'The pandemic has seen a drastic shift in our thinking related to traditional and long-term supply chains that were stressed and failed in many situations.'

There is increasing carve out and merger and acquisitions, associated with the moving around and re-prioritisation of supply chains.

The move to S4 has been forced on organisations; we all must make that shift; we must start implementing the changes and strategies for that move. Automation can accelerate that move and should be a key consideration as organisations embark on their migration strategy, potentially reducing the move to a matter of months.

While the polling percentages were different when it came to the business scenarios, 50% for S/4 HANA and 33% for the move to the cloud, they are not mutually exclusive. Most customers should look to move to cloud and S/4 HANA at the same time.

Modernise, rationalise and future proof mission-critical workloads

ERP was created to provide business leaders with a consolidated view of their organisation's performance. These systems were built around a group of tightly integrated modules so transactions recorded in one part of the business would automatically flow through. For example, a front of house sale would automatically reduce stock in hand in the inventory system.

However, over time they have become inflexible and unwieldy, particularly as ever-increasing amounts of, often unstructured, data has been added to the mix.

If legacy modernisation is a goal for most organisations ADAPT speaks to, data transformation and the ability to change entrenched mindsets is key.

In this next normal of a 'post-pandemic' world, flexibility is a non-negotiable across the business spectrum.

'Flexibility and agility are critical to enabling organisations to move quickly in such areas as mergers and acquisitions, restructuring and divesting business units and introducing new product lines.'

Mission-critical workloads that curtail flexibility and our ability to become truly data-driven businesses must be considered ripe for migration to the cloud. We must ensure that we modernise, rationalise, and emerge from the pandemic more agile, nimble, and no longer weighed down by the legacy headaches of yesterday.

Matt Boon, Director of Strategic Research at ADAPT